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• The Company achieved robust growth across total filing volumes, total market share, Assisted filings and market share, and Do-It-Yourself (DIY) revenue in the 2021 tax season. When including total tax season performance through the May 17, 2021 filing deadline, the Company substantially exceeded its original fiscal 2021 revenue and earnings outlook.
  
• The Company announced a 4% increase in its quarterly dividend to $0.27 per share. This is the fifth increase in six years, resulting in a 35% total increase in that time frame.
• The Company repurchased 2.1
  
  ¹
  
  million shares in its fiscal fourth quarter, resulting in total share repurchases of 11.6 million shares and $188 million, or $16.29 per share, for fiscal 2021.
• The Company announced its fiscal year-end will change to June 30, effective immediately.

KANSAS CITY, Mo., June 15, 2021 (GLOBE NEWSWIRE) — H&R Block, Inc. (NYSE: HRB) (the “Company”) today released its financial results for the fiscal year ended April 30, 2021. The extension of the U.S. federal tax filing deadline from April 15 to May 17 resulted in the tax season concluding beyond fiscal 2021. Including performance through May 18, 2021, in fiscal 2021, would result in the Company substantially exceeding its original revenue and earnings outlook for 2021.

“I am proud of the outstanding growth across our business,” said Jeff Jones, H&R Block’s president and chief executive officer. “Our team provided help and inspired financial confidence for millions of consumers and small business owners this year. We made tremendous progress in our first year of Block Horizons, blending technology and digital tools with human expertise in tax, improving our offerings in small business, driving significant growth in Wave, and making progress on our new mobile banking platform.”

Fiscal 2021 Results From Continuing Operations

“Growth in total filings, strong performance from Wave, and proactive fiscal management resulted in a strong 2021 that exceeded our expectations,” said Tony Bowen, H&R Block’s chief financial officer. “We are confident in our future, as evidenced by increasing our quarterly dividend by 4% and repurchasing 6% of our shares outstanding this fiscal year.”

(in millions, except EPS)		Fiscal Year 2021				Fiscal Year 2020
Revenue		$	3,414			$	2,640
Pretax Income (Loss)		$	669			$	(3	)
Net Income		$	590			$	6
Weighted-Avg. Shares – Diluted		188.8				198.1
EPS 2		$	3.11			$	0.03
Adjusted EPS 2,3		$	3.39			$	0.84
Adjusted EBITDA 3		$	932			$	368

Key Financial Metrics

• Total revenue of $3.4 billion increased by $774 million, or 29.3%, due to an increase in U.S. tax return volumes due to the extension of the 2020 tax season into our fiscal 2021, stronger mix in DIY, Emerald Card revenues related to federal stimulus payments, and strong growth from Wave.
• Total operating expenses of $2.6 billion increased by $82 million, or 3.2%, due to an increase in variable labor, partially offset by impairment charges related to the pandemic in fiscal 2020, and lower bank partner fees and travel-related costs.
• Pretax income of $669 million compared favorably to a pretax loss of $3 million in the prior year.
• Earnings per share from continuing operations increased $3.08 to $3.11; adjusted earnings per share from continuing operations increased from $0.84 to $3.39.

Dividends and Share Repurchases

The company announced today that its Board of Directors increased the quarterly dividend by 4%, representing the fifth increase in the dividend in six years and a 35% total increase over that time frame. The quarterly cash dividend is now $0.27 per share, payable on July 1, 2021 to shareholders of record as of June 25, 2021. The Company has paid consecutive quarterly dividends since it became publicly traded in 1962. Future actions regarding dividends will be dependent upon the Board’s approval following consideration of operating results, market conditions, and capital needs, among other factors.

In fiscal 2021, the company repurchased 11.6 million shares for $188 million, at an average price of $16.29. Share repurchases made in the fourth quarter of fiscal 2021 totaled $38 million. Approximately $564 million remains under the company’s current share repurchase authorization, which expires in June of 2022.

Line of Credit

The Company amended its line of credit to a new five-year term, resulting in favorable rates, reduced capacity to better align with business needs, and lower costs. Additional details regarding this line of credit can be found in a related Form 8-K filing today.

Change in Fiscal Year

The Company announced a change to its fiscal year-end from April 30 to June 30, effective immediately. The change allows for better alignment of complete tax seasons in comparable fiscal periods and other related benefits. The Company plans to file a transition report on form 10-QT for the transition period of May 1, 2021, through June 30, 2021, later this summer. The Company’s fiscal 2022 will begin on July 1, 2021, and end on June 30, 2022.

Discontinued Operations

For information on Sand Canyon, please refer to disclosures in the company’s reports on Forms 10-K, 10-Q, and other filings with the SEC.

Conference Call

Discussion of fiscal 2021 results, outlook, and a general business update will occur during the company’s previously announced fiscal 2021 conference call for analysts and investors that will be held at 4:30 p.m. Eastern Time on Tuesday, June 15, 2021. To access the call, please dial the number below approximately 10 minutes prior to the scheduled starting time:

U.S./Canada (855) 859-2056 or International (404) 537-3406

Conference ID: 2575807

The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and public. The link to the webcast can be accessed directly at https://investors.hrblock.com. The presentation will be posted on the Quarterly Results page at https://investors.hrblock.com following the conclusion of the call.

A replay of the call will be available beginning at 7:30 p.m. Eastern time on June 15, 2021 and continuing for seven days by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 5554906. The webcast will be available for replay beginning on June 17, 2021 and continuing for 90 days at https://investors.hrblock.com.

About H&R Block

H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation, financial services and small business solutions. The company blends digital innovation with the human expertise of its associates and franchisees as it helps people get the best outcome at tax time, and better manage and access their money year-round. Through Block Advisors and Wave, the company helps small business owners thrive with innovative products like Wave Money, a small business banking and bookkeeping solution, and the only business bank account to manage bookkeeping automatically. For more information visit hrblock.com/news and follow @HRBlockNews.

About Non-GAAP Financial Information

This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled “Non-GAAP Financial Information.”

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “commits,” “seeks,” “estimates,” “projects,” “forecasts,” “targets,” “would,” “will,” “should,” “goal,” “could,” “may,” or other similar expressions. Forward-looking statements provide management’s current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes, or other financial items, descriptions of management’s plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. They also include the expected impact of the coronavirus (COVID-19) pandemic, including, without limitation, the impact on economic and financial markets, the Company’s capital resources and financial condition, the expected use of proceeds under the Company’s revolving credit facility, future expenditures, potential regulatory actions, such as extensions of tax filing deadlines or other related relief, changes in consumer behaviors and modifications to the Company’s operations related thereto. All forward-looking statements speak only as of the date they are made and reflect the company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive and regulatory factors, many of which are beyond the company’s control, that are described in our Annual Report on Form 10-K for the most recently completed fiscal year in the section entitled “Risk Factors” and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at http://investors.hrblock.com. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
__________________

¹  All amounts in this release are unaudited.  Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.
² All per share amounts are based on weighted average fully diluted shares over the corresponding period.
³ Adjusted earnings per share from continuing operations and adjusted EBITDA from continuing operations are non-GAAP financial measures. See “About Non-GAAP Financial Information” below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).

For Further Information

Investor Relations:		Colby Brown, (816) 854-4559, [email protected]
		Michaella Gallina, (816) 854-3022, [email protected]
Media Relations:		Angela Davied, (816) 854-5798, [email protected]

CONSOLIDATED STATEMENTS OF OPERATIONS												(unaudited, in 000s – except per share amounts)
		Three months ended April 30,										Year ended April 30,
		2021					2020					2021					2020
REVENUES:
Service revenues		$	2,110,618				$	1,635,561				$	3,067,223				$	2,327,323
Royalty, product and other revenues		217,562					173,791					346,764					312,397
		2,328,180					1,809,352					3,413,987					2,639,720
OPERATING EXPENSES:
Costs of revenues		901,728					767,157					1,842,092					1,712,276
Impairment of goodwill		—					106,000					—					106,000
Selling, general and administrative		340,900					268,603					802,268					744,361
Total operating expenses		1,242,628					1,141,760					2,644,360					2,562,637
Other income (expense), net		1,220					1,896					5,979					15,637
Interest expense on borrowings		(21,551		)			(27,412		)			(106,870		)			(96,094		)
Income (loss) from continuing operations before income taxes (benefit)		1,065,221					642,076					668,736					(3,374		)
Income taxes (benefit)		114,254					178,616					78,524					(9,530		)
Net income from continuing operations		950,967					463,460					590,212					6,156
Net loss from discontinued operations		(1,715		)			(3,057		)			(6,421		)			(13,682		)
NET INCOME (LOSS)		$	949,252				$	460,403				$	583,791				$	(7,526	)
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations		$	5.22				$	2.40				$	3.15				$	0.03
Discontinued operations		(0.01		)			(0.01		)			(0.04		)			(0.07		)
Consolidated		$	5.21				$	2.39				$	3.11				$	(0.04	)
WEIGHTED AVERAGE BASIC SHARES		181,512					192,475					186,832					196,701
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations		$	5.14				$	2.39				$	3.11				$	0.03
Discontinued operations		(0.01		)			(0.02		)			(0.03		)			(0.07		)
Consolidated		$	5.13				$	2.37				$	3.08				$	(0.04	)
WEIGHTED AVERAGE DILUTED SHARES		184,354					193,726					188,777					198,108

CONSOLIDATED BALANCE SHEETS		(unaudited, in 000s – except per share data)
As of April 30,		2021					2020
ASSETS
Cash and cash equivalents		$	934,251				$	2,661,914
Cash and cash equivalents – restricted		128,669					211,106
Receivables, net		197,876					133,197
Income taxes receivable		333,366					28,477
Prepaid expenses and other current assets		105,562					52,042
Total current assets		1,699,724					3,086,736
Property and equipment, net		148,490					184,367
Operating lease right of use asset		437,246					494,788
Intangible assets, net		360,148					414,976
Goodwill		757,659					712,138
Deferred tax assets and income taxes receivable		182,848					151,195
Other noncurrent assets		67,531					67,847
Total assets		$	3,653,646				$	5,112,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Accounts payable and accrued expenses		$	198,084				$	203,103
Accrued salaries, wages and payroll taxes		270,982					116,375
Accrued income taxes and reserves for uncertain tax positions		287,404					209,816
Current portion of long-term debt		—					649,384
Operating lease liabilities		206,393					195,537
Deferred revenue and other current liabilities		200,216					201,401
Total current liabilities		1,163,079					1,575,616
Long-term debt and line of credit borrowings		1,490,039					2,845,873
Deferred tax liabilities and reserves for uncertain tax positions		279,351					182,441
Operating lease liabilities		242,626					312,566
Deferred revenue and other noncurrent liabilities		126,150					124,510
Total liabilities		3,301,245					5,041,006
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, no par, stated value $.01 per share		2,167					2,282
Additional paid-in capital		783,292					775,387
Accumulated other comprehensive income (loss)		4,786					(51,576		)
Retained earnings		248,506					42,965
Less treasury shares, at cost		(686,350		)			(698,017		)
Total stockholders’ equity		352,401					71,041
Total liabilities and stockholders’ equity		$	3,653,646				$	5,112,047

CONSOLIDATED STATEMENTS OF CASH FLOWS		(unaudited, in 000s)
Year ended April 30,		2021					2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	583,791				$	(7,526	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		156,852					169,536
Provision for bad debt		73,451					76,621
Deferred taxes		(22,583		)			(8,300		)
Stock-based compensation		28,271					28,045
Impairment of goodwill		—					106,000
Changes in assets and liabilities, net of acquisitions:
Receivables		(150,933		)			(66,896		)
Prepaid expenses and other current and noncurrent assets		(49,498		)			39,377
Accounts payable, accrued expenses, salaries, wages and payroll taxes		150,635					(124,019		)
Deferred revenue, other current and noncurrent liabilities		(1,160		)			(9,096		)
Income tax receivables, accrued income taxes and income tax reserves		(138,152		)			(87,423		)
Other, net		(4,746		)			(7,358		)
Net cash provided by operating activities		625,928					108,961
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(52,792		)			(81,685		)
Payments made for business acquisitions, net of cash acquired		(15,576		)			(450,242		)
Franchise loans funded		(26,917		)			(35,264		)
Payments from franchisees		41,215					39,919
Other, net		8,547					57,041
Net cash used in investing activities		(45,523		)			(470,231		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings		(3,275,000		)			(1,335,000		)
Proceeds from line of credit borrowings		1,275,000					3,335,000
Repayments of long-term debt		(650,000		)			—
Proceeds from issuance of long-term debt		647,965					—
Dividends paid		(195,068		)			(204,870		)
Repurchase of common stock, including shares surrendered		(191,294		)			(256,214		)
Proceeds from exercise of stock options		2,140					2,075
Other, net		(22,566		)			(9,143		)
Net cash provided by (used in) financing activities		(2,408,823		)			1,531,848
Effects of exchange rate changes on cash		18,318					(5,285		)
Net increase (decrease) in cash and cash equivalents, including restricted balances		(1,810,100		)			1,165,293
Cash, cash equivalents and restricted cash, beginning of the year		2,873,020					1,707,727
Cash, cash equivalents and restricted cash, end of the year		$	1,062,920				$	2,873,020
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net of refunds received		$	236,459				$	89,204
Interest paid on borrowings		103,855					87,426
Accrued additions to property and equipment		1,643					1,185

FINANCIAL RESULTS		(unaudited, in 000s – except per share amounts)
		Three months ended April 30,										Year ended April 30,
		2021					2020					2021					2020
REVENUES:
U.S. assisted tax preparation		$	1,493,968				$	1,175,129				$	2,035,107				$	1,533,303
U.S. royalties		158,826					133,767					226,253					193,411
U.S. DIY tax preparation		218,724					166,861					313,055					208,901
International		117,521					82,754					249,868					180,065
Refund Transfers		151,577					101,893					163,329					154,687
Emerald Card®		87,916					53,609					136,717					92,737
Peace of Mind® Extended Service Plan		26,011					29,734					98,882					105,185
Tax Identity Shield®		21,495					14,489					40,624					31,797
Interest and fee income on Emerald AdvanceSM		24,676					27,087					53,430					60,867
Wave		17,080					10,971					58,277					36,711
Other		10,386					13,058					38,445					42,056
Total revenues		2,328,180					1,809,352					3,413,987					2,639,720
Compensation and benefits:
Field wages		490,711					398,582					797,262					678,813
Other wages		90,654					40,159					272,664					218,548
Benefits and other compensation		102,566					74,956					208,147					175,535
		683,931					513,697					1,278,073					1,072,896
Occupancy		116,508					117,932					414,389					410,402
Marketing and advertising		167,007					153,904					261,960					255,094
Depreciation and amortization		39,689					44,127					156,852					169,536
Bad debt		50,004					39,876					78,763					77,470
Impairment of goodwill		—					106,000					—					106,000
Other		185,489					166,224					454,323					471,239
Total operating expenses		1,242,628					1,141,760					2,644,360					2,562,637
Other income (expense), net		1,220					1,896					5,979					15,637
Interest expense on borrowings		(21,551		)			(27,412		)			(106,870		)			(96,094		)
Income (loss) from continuing operations before income taxes (benefit)		1,065,221					642,076					668,736					(3,374		)
Income taxes (benefit)		114,254					178,616					78,524					(9,530		)
Net income from continuing operations		950,967					463,460					590,212					6,156
Net loss from discontinued operations		(1,715		)			(3,057		)			(6,421		)			(13,682		)
NET INCOME (LOSS)		$	949,252				$	460,403				$	583,791				$	(7,526	)
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations		$	5.22				$	2.40				$	3.15				$	0.03
Discontinued operations		(0.01		)			(0.01		)			(0.04		)			(0.07		)
Consolidated		$	5.21				$	2.39				$	3.11				$	(0.04	)
WEIGHTED AVERAGE BASIC SHARES		181,512					192,475					186,832					196,701
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations		$	5.14				$	2.39				$	3.11				$	0.03
Discontinued operations		(0.01		)			(0.02		)			(0.03		)			(0.07		)
Consolidated		$	5.13				$	2.37				$	3.08				$	(0.04	)
WEIGHTED AVERAGE DILUTED SHARES		184,354					193,726					188,777					198,108
Adjusted EPS(1)		$	5.16				$	3.01				$	3.39				$	0.84
EBITDA(1)		1,126,461					713,615					932,458					262,256
Adjusted EBITDA (1)		1,126,461					819,615					932,458					368,256
Adjusted EBITDA margin (1)		48.4		%			45.3		%			27.3		%			14.0		%

⁽¹⁾ All non-GAAP measures are results from continuing operations. See “Non-GAAP Financial Information” for a reconciliation of non-GAAP measures.

NON-GAAP FINANCIAL MEASURES
														(in 000s)
		Three months ended April 30,								Year ended April 30,
NON-GAAP FINANCIAL MEASURE – EBITDA		2021				2020				2021				2020
Net income (loss) – as reported		$	949,252			$	460,403			$	583,791			$	(7,526	)
Discontinued operations, net		1,715				3,057				6,421				13,682
Net income from continuing operations – as reported		950,967				463,460				590,212				6,156
Add back:
Income taxes (benefit)		114,254				178,616				78,524				(9,530		)
Interest expense		21,551				27,412				106,870				96,094
Depreciation and amortization		39,689				44,127				156,852				169,536
		175,494				250,155				342,246				256,100
EBITDA from continuing operations		1,126,461				713,615				932,458				262,256
Adjustments:
Impairment of goodwill		—				106,000				—				106,000
Adjusted EBITDA from continuing operations		$	1,126,461			$	819,615			$	932,458			$	368,256
EBITDA margin from continuing operations (1)		48.4		%		39.4		%		27.3		%		9.9		%
Adjusted EBITDA margin from continuing operations (2)		48.4		%		45.3		%		27.3		%		14.0		%

⁽¹⁾ EBITDA margin from continuing operations is computed as EBITDA from continuing operations divided by revenues from continuing operations.
⁽²⁾ Adjusted EBITDA margin from continuing operations is computed as adjusted EBITDA from continuing operations divided by revenues from continuing operations.

												(in 000s, except per share amounts)
		Three months ended April 30,										Year ended April 30,
NON-GAAP FINANCIAL MEASURE – ADJUSTED EPS		2021					2020					2021					2020
Net income from continuing operations – as reported		$	950,967				$	463,460				$	590,212				$	6,156
Adjustments:
Amortization of intangibles related to acquisitions (pretax)		16,211					19,564					68,387					74,561
Impairment of goodwill (pretax)		—					106,000					—					106,000
Tax effect of adjustments(1)		(11,741		)			(5,459		)			(15,884		)			(19,126		)
Adjusted net income from continuing operations		$	955,437				$	583,565				$	642,715				$	167,591
Diluted earnings per share from continuing operations – as reported		$	5.14				$	2.39				$	3.11				$	0.03
Adjustments, net of tax		0.02					0.62					0.28					0.81
Adjusted diluted earnings per share from continuing operations		$	5.16				$	3.01				$	3.39				$	0.84

⁽¹⁾ The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.

NON-GAAP FINANCIAL INFORMATION

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. We make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions and goodwill impairments. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, EBITDA margin from continuing operations, adjusted EBITDA margin from continuing operations, adjusted diluted earnings per share from continuing operations and free cash flow. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.

MONROE, Mich., June 15, 2021 (GLOBE NEWSWIRE) — La-Z-Boy Incorporated (NYSE: LZB), a global leader in residential furniture, today reported strong operating results for the fiscal 2021 fourth quarter and full year ended April 24, 2021.

Fiscal 2021 fourth quarter versus Fiscal 2020 fourth quarter

:

• Consolidated sales increased 41% to $519.5 million
• Written same-store sales for the entire La-Z-Boy Furniture Galleries^® network doubled, increasing 100%
• Consolidated operating margin:
  • GAAP: 9.6% versus 3.7%
  • Non-GAAP⁽¹⁾: 10.0% versus 9.3%
    • Wholesale⁽²⁾: 10.2% versus 11.1%
    • Retail: 12.2% versus 10.8%
• Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):
  • GAAP: $0.81 versus $0.05
  • Non-GAAP⁽¹⁾: $0.87 versus $0.49
• The company returned $50 million to shareholders through share repurchases and dividends

Fiscal 2021 full year versus Fiscal 2020 full year

:

• Consolidated sales increased 1.8% to $1.7 billion
• Written same-store sales for the entire La-Z-Boy Furniture Galleries^® network increased 31%
• Consolidated operating margin:
  • GAAP: 7.9% versus 7.0%
  • Non-GAAP⁽¹⁾: 9.0% versus 8.2%
    • Wholesale⁽²⁾: 10.6% versus 10.6%
    • Retail: 7.7% versus 8.2%
    • Joybird became profitable
• Net income attributable to La-Z-Boy Incorporated per diluted share (“EPS”):
  • GAAP: $2.30 versus $1.66
  • Non-GAAP⁽¹⁾: $2.62 versus $2.16
• Cash generated from operating activities of $310 million versus $164 million in the prior year
• Cash⁽³⁾ at fiscal year end increased to $395 million versus $264 million in the prior year
• The company returned $61 million to shareholders through share repurchases and dividends

Melinda D. Whittington, President and Chief Executive Officer of La-Z-Boy, said, “In an extremely difficult year marked by the pandemic, related macroeconomic uncertainty and supply chain disruption, we delivered strong results. Our start to the fiscal year in May 2020 came as the world was still in the early stages of its COVID-19 response. We had just restarted our plants after a month-long shutdown and retailers were slowly beginning to reopen. Progressing strongly from that starting point, for the fiscal 2021 full year, we delivered consolidated non-GAAP⁽¹⁾ operating margin of 9%, generated $310 million in cash from operations, and returned $61 million to shareholders through share repurchases and dividends. Additionally, we strengthened our business by significantly expanding production capacity, enhanced our retail platform, including the acquisition of the Seattle-based La-Z-Boy Furniture Galleries^® stores, and turned Joybird profitable. All business units are experiencing record demand, demonstrating the strength of our brands in the marketplace combined with fantastic execution from all retail and sales teams. I thank every employee across the La-Z-Boy enterprise for their agility, hard work and dedication, all of which contributed to our excellent performance while in the midst of historic challenges.

“For the fiscal 2021 fourth quarter, record sales led to all-time record profits driven by increased production capacity, excellent performance by our company-owned La-Z-Boy Furniture Galleries^® stores, and continued growth and profitability at Joybird. And, fiscal 2022 is off to a great start with continued robust written order rates and a record backlog, setting us up well for a strong year of shipments ahead.”

Consolidated sales in the fourth quarter of fiscal 2021 increased 41.4% to $519.5 million versus the fiscal 2020 fourth quarter, which was impacted by COVID-19-related plant and retail closures. Consolidated GAAP operating margin increased to 9.6% versus 3.7% in the prior-year fourth quarter. Consolidated non-GAAP⁽¹⁾ operating margin improved to 10.0% versus 9.3% in last year’s fourth quarter, reflecting strong performance across all business units.

For the entire La-Z-Boy Furniture Galleries^® network, written same-store sales doubled, increasing 100%, for the fiscal 2021 fourth quarter compared with the fiscal 2020 fourth quarter. Compared with the pre-pandemic fiscal 2019 fourth quarter, written same-store sales for the La-Z-Boy Furniture Galleries^® network increased 29%.

For the fiscal 2021 fourth quarter, delivered sales in the company’s Wholesale⁽²⁾ segment increased 40% to $384.0 million compared with the prior-year fourth quarter, which was impacted by COVID-19. Non-GAAP⁽¹⁾ operating margin for the Wholesale⁽²⁾ segment was a healthy 10.2% versus 11.1% for the prior-year period, reflecting disciplined cost management on advertising which helped offset higher raw material and freight costs and expenses to expand production capacity to service record backlog. Last year’s fourth quarter benefited from a one-time rebate of previously paid tariffs partially offset by higher bad debt expense.

Retail segment delivered sales increased 39% to $193.5 million in the fourth quarter of fiscal 2021 compared with the prior-year fourth quarter. Written same-store sales for the company-owned La-Z-Boy Furniture Galleries^® stores more than doubled, increasing 114% in the quarter, reflecting positive trends across all sales metrics, including traffic, conversion and average ticket, versus last year’s fourth quarter which included store closures during the last four weeks of the period. Non-GAAP⁽¹⁾ operating margin for the Retail segment was 12.2% in the fiscal 2021 fourth quarter versus 10.8% in last year’s fourth quarter, primarily driven by fixed-cost leverage on higher delivered sales volume.

Within Corporate & Other, Joybird sales more than doubled compared with the prior-year quarter, increasing 144% to $37.7 million. Written sales increased 125% compared with the prior-year quarter, reflecting ongoing strong order trends and the strength of the brand in the online marketplace. For the third consecutive quarter, Joybird posted strong gross margins, delivered profitable growth and increased conversion rates while increasing its marketing spend to drive customer acquisition.

GAAP diluted EPS was $0.81 for the fiscal 2021 fourth quarter versus $0.05 in the prior-year quarter. Non-GAAP⁽¹⁾ diluted EPS was $0.87 versus $0.49 in last year’s fourth quarter.

Balance Sheet and Cash Flow

For fiscal 2021, the company generated $310 million in cash from operating activities, reflecting strong profit performance and a $140 million increase in customer deposits from written orders for the company’s Retail segment and Joybird. La-Z-Boy ended the period with $395 million in cash⁽³⁾ and no debt, compared with $264 million in cash⁽³⁾ and $75 million in short-term borrowings at the end of fiscal 2020. The company holds $32 million in investments to enhance returns on cash versus $29 million at the end of fiscal 2020. In fiscal 2021 the company spent $8 million related to acquisitions, invested $38 million in the business through capital expenditures, paid $17 million in dividends and spent $44 million repurchasing approximately 1.1 million shares of stock in the open market under its existing authorized share repurchase program, leaving 3.4 million shares available for repurchase under the program as of April 24, 2021.

Business Outlook

Demand trends remain strong across the business with backlog at record levels. The company anticipates ongoing incremental increases in manufacturing capacity throughout fiscal 2022 that will enable higher delivered sales, but expects ongoing global supply chain disruptions and headwinds related to raw materials and freight costs will cause some volatility in results. In the short term, the company expects a temporary negative impact to profit margins versus very strong fourth-quarter results due to dramatic raw material price increases which will only be offset by previously announced pricing actions as the company works through its backlog in the back half of the year.

Incoming order rates and backlog will mitigate the usual seasonal slowdown associated with the first quarter. However, as usual, capacity in the first quarter is limited to 12 weeks of production/shipments to enable a shutdown week in July for maintenance for most of the company’s plants, compared with 13 weeks in the second and fourth quarters.

Whittington said, “As we look ahead, our prudent financial culture and strong cash position provide opportunities for investment in our next chapter of growth. For the immediate term, we are focused on continuing to increase capacity and deliver units while making investments in technology solutions across the company, our stores, and updating and expanding our plants, all to enhance the consumer experience, drive future growth and emerge stronger in a post-pandemic environment.”

⁽¹⁾



Non-GAAP amounts for the full fiscal 2021 year exclude:

• purchase accounting charges related to acquisitions totaling $16.7 million pre-tax, or $0.33 per diluted share, primarily due to a write-up of the Joybird contingent consideration liability based on forecasted future performance, with $16.0 million included in operating income and $0.7 million included in interest expense;
• a charge of $3.8 million pre-tax, or $0.07 per diluted share, related to the company’s business realignment initiative announced in June 2020; and
• income of $5.2 million pre-tax, or $0.08 per diluted share, related to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) recorded in other income related to the impact of employee retention credits.
  

Non-GAAP amounts for the full fiscal 2020 year exclude:

• a non-cash, non-tax deductible goodwill impairment charge of $26.9 million pre-tax, or $0.58 per diluted share;
• a non-cash charge of $6.0 million pre-tax, or $0.09 per share, related to an impairment for one investment;
• a purchase accounting net benefit of $1.4 million pre-tax, or $0.07 per diluted share, with a $2.1 million benefit included in operating income and $0.7 million expense included in interest expense
• a net benefit of $4.4 million pre-tax, or $0.07 per diluted share, related to the company’s supply chain optimization initiative, including the closure and sale of the company’s Redlands, California upholstery manufacturing facility and relocation of its Newton, Mississippi leather cut-and-sew operations; and
• a benefit of $1.9 million pre-tax, or $0.03 per diluted share, related to the 2019 termination of the company’s defined benefit pension plan.
  

Non-GAAP amounts for the fourth quarter of fiscal 2021 exclude:

• purchase accounting charges related to acquisitions totaling $2.0 million pre-tax, plus related tax adjustments, or $0.06 per diluted share, primarily due to a write-up of the Joybird contingent consideration liability based on forecasted performance, with $1.9 million included in operating income and $0.1 million included in interest expense.
  

Non-GAAP amounts for the fourth quarter of fiscal 2020 exclude:

• a non-cash, non-tax deductible goodwill impairment charge of $26.9 million pre-tax, or $0.58 per diluted share;
• a purchase accounting net benefit of $5.9 million pre-tax, or $0.14 per diluted share, with a $6.1 million benefit included in operating income and $0.2 million included in interest expense; and
• a benefit of $0.1 million pre-tax, or $0.00 per diluted share, related to the company’s supply chain optimization initiative, including the closure of the company’s Redlands, California upholstery manufacturing facility.
  

Please refer to the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” for detailed information on calculating the Non-GAAP measures used in this press release and a reconciliation to the most directly comparable GAAP measure.

⁽²⁾



Wholesale segment:

Effective in the first quarter of fiscal 2021, in order to better align with the manner in which we view and manage the business, coupled with economic and customer channel similarities, the company revised its reportable operating segments by aggregating the former Upholstery segment with the former Casegoods segment to form the newly combined Wholesale segment. The change in reportable operating segments reflects how the company evaluates financial information used to make operating decisions. Prior-period results disclosed in this earnings release with respect to the Wholesale segment have been revised to reflect these changes.

⁽³⁾



Cash

includes cash, cash equivalents and restricted cash.

Conference Call

La-Z-Boy will hold a conference call with the investment community on Wednesday, June 16, 2021, at 8:30 a.m. Eastern time. The toll-free dial-in number is 844.602.0380; international callers may use 862.298.0970.

The call will be webcast live, with corresponding slides, and archived on the Internet. It will be available at https://lazboy.gcs-web.com/. A telephone replay will be available for a week following the call. This replay will be accessible to callers from the U.S. and Canada at 877.481.4010 and to international callers at 919.882.2331. Enter Replay Passcode: 41347. The webcast replay will be available for one year.

Cautionary Note Regarding Forward-Looking Statements

This news release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, business, and industry and the effect of the novel coronavirus (“COVID-19”) pandemic on our business operations and financial results.

The forward-looking statements in this press release are based on certain assumptions and currently available information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control, such as the continuing and developing impact of, and uncertainty caused by, the COVID-19 pandemic. Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial results. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our fiscal 2021 Annual Report on Form 10-K and other factors identified in our reports filed with the Securities and Exchange Commission. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason.

Additional Information

This news release is just one part of La-Z-Boy’s financial disclosures and should be read in conjunction with other information filed with the Securities and Exchange Commission, which is available at: https://lazboy.gcs-web.com/financial-information/sec-filings. Investors and others wishing to be notified of future La-Z-Boy news releases, SEC filings and quarterly investor conference calls may sign up at: https://lazboy.gcs-web.com/. 

Background Information

La-Z-Boy Incorporated is one of the world’s leading residential furniture producers, marketing furniture for every room of the home. The Wholesale segment includes England, La-Z-Boy, American Drew^®, Hammary^®, and Kincaid^®. The company-owned Retail segment includes 159 of the 354 La-Z-Boy Furniture Galleries^® stores. Joybird is an e-commerce retailer and manufacturer of upholstered furniture.

The corporation’s branded distribution network is dedicated to selling La-Z-Boy Incorporated products and brands, and includes 354 stand-alone La-Z-Boy Furniture Galleries^® stores and 561 independent Comfort Studio^® locations, in addition to in-store gallery programs for the company’s Kincaid and England operating units. Additional information is available at http://www.la-z-boy.com/.

Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), this press release also includes Non-GAAP financial measures. Management uses these Non-GAAP financial measures when assessing our ongoing performance. This press release contains references to Non-GAAP operating income, Non-GAAP operating margin, Non-GAAP income before income taxes, Non-GAAP net income attributable to La-Z-Boy Incorporated and Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share, which may exclude, as applicable, goodwill impairment charges, business realignment charges, purchase accounting charges, charges for our supply chain optimization initiative, an impairment charge for one investment, benefits from the CARES Act, and refunds related to terminating the company’s defined benefit pension plan. The business realignment charges include severance costs, asset impairment costs, and costs to relocate equipment and inventory related to organizational changes we undertook as a result of our COVID-19 Action Plan. The purchase accounting charges may include the amortization of intangible assets, incremental expense upon the sale of inventory acquired at fair value, amortization of employee retention agreements, fair value adjustments of future cash payments recorded as interest expense, and adjustments to the fair value of contingent consideration. The charges for our supply chain optimization initiative may include severance costs, accelerated depreciation expense, costs to relocate equipment and inventory, as well as other costs related to the closure, relocation and sale of certain manufacturing operations. The benefits from the CARES Act include the impact of employee retention credits. These Non-GAAP financial measures are not meant to be considered superior to or a substitute for La-Z-Boy Incorporated’s results of operations prepared in accordance with GAAP and may not be comparable to similarly titled measures reported by other companies. Reconciliations of such Non-GAAP financial measures to the most directly comparable GAAP financial measures are set forth in the accompanying tables.

Management believes that presenting certain Non-GAAP financial measures will help investors understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. Management excludes goodwill impairment charges and purchase accounting charges because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions consummated and the success with which we operate the businesses acquired. While the company has a history of acquisition activity, it does not acquire businesses on a predictable cycle, and the impact of goodwill impairment charges and purchase accounting charges is unique to each acquisition and can vary significantly from acquisition to acquisition. Similarly, business realignment charges and the charges related to the company’s supply chain optimization initiative are dependent on the timing, size, number and nature of the operations being moved or closed, and the charges may not be incurred on a predictable cycle. Management also excludes an impairment charge for one investment, benefits from the CARES Act and refunds related to the termination of the company’s defined benefit pension plan when assessing the company’s operating and financial performance due to the one-time nature of these transactions. Management believes that exclusion of these items facilitates more consistent comparisons of the company’s operating results over time. Where applicable, the accompanying “Reconciliation of GAAP to Non-GAAP Financial Measures” tables present the excluded items net of tax calculated using the effective tax rate from operations for the period in which the adjustment is presented, except for the non-tax deductible goodwill impairment charge and the adjustment to the fair value of contingent consideration which reflects the associated GAAP tax impact in the period presented.

Contact:

Kathy Liebmann
(734) 241-2438
[email protected] 

LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF INCOME

		Quarter Ended								Year Ended
(Unaudited, amounts in thousands, except per share data)		4/24/2021				4/25/2020				4/24/2021				4/25/2020
Sales		$	519,470			$	367,281			$	1,734,244			$	1,703,982
Cost of sales		297,380				195,575				993,984				982,537
Gross profit		222,090				171,706				740,260				721,445
Selling, general and administrative expense		172,032				131,418				603,524				575,821
Goodwill impairment		—				26,862				—				26,862
Operating income		50,058				13,426				136,736				118,762
Interest expense		(287		)		(400		)		(1,390		)		(1,291		)
Interest income		199				692				1,101				2,785
Pension termination refund		—				—				—				1,900
Other income (expense), net		1,471				307				9,466				(6,983		)
Income before income taxes		51,441				14,025				145,913				115,173
Income tax expense		13,484				10,649				38,384				36,189
Net income		37,957				3,376				107,529				78,984
Net income attributable to noncontrolling interests		(461		)		(1,081		)		(1,068		)		(1,515		)
Net income attributable to La-Z-Boy Incorporated		$	37,496			$	2,295			$	106,461			$	77,469
Basic weighted average common shares		45,739				45,962				45,983				46,399
Basic net income attributable to La-Z-Boy Incorporated per share		$	0.82			$	0.05			$	2.31			$	1.67
Diluted weighted average common shares		46,316				46,157				46,367				46,736
Diluted net income attributable to La-Z-Boy Incorporated per share		$	0.81			$	0.05			$	2.30			$	1.66

LA-Z-BOY INCORPORATED

CONSOLIDATED BALANCE SHEET

(Unaudited, amounts in thousands, except par value)		4/24/2021				4/25/2020
Current assets
Cash and equivalents		$	391,213			$	261,553
Restricted cash		3,490				1,975
Receivables, net of allowance of $4,011 at 4/24/2021 and $7,541 at 4/25/2020		139,341				99,351
Inventories, net		226,137				181,643
Other current assets		165,979				81,804
Total current assets		926,160				626,326
Property, plant and equipment, net		219,194				214,767
Goodwill		175,814				161,017
Other intangible assets, net		30,431				28,653
Deferred income taxes – long-term		11,915				20,839
Right of use lease assets		343,800				318,647
Other long-term assets, net		79,008				64,640
Total assets		$	1,786,322			$	1,434,889
Current liabilities
Accounts payable		$	94,152			$	55,511
Short-term borrowings		—				75,000
Lease liabilities, current		67,614				64,376
Accrued expenses and other current liabilities		449,904				155,282
Total current liabilities		611,670				350,169
Lease liabilities, long-term		295,023				270,162
Other long-term liabilities		97,483				98,252
Shareholders’ equity
Preferred shares – 5,000 authorized; none issued		—				—
Common shares, $1 par value – 150,000 authorized; 45,361 outstanding at 4/24/2021 and 45,857 outstanding at 4/25/2020		45,361				45,857
Capital in excess of par value		330,648				318,215
Retained earnings		399,010				343,633
Accumulated other comprehensive loss		(1,521		)		(6,952		)
Total La-Z-Boy Incorporated shareholders’ equity		773,498				700,753
Noncontrolling interests		8,648				15,553
Total equity		782,146				716,306
Total liabilities and equity		$	1,786,322			$	1,434,889

LA-Z-BOY INCORPORATED

CONSOLIDATED STATEMENT OF CASH FLOWS

		Year Ended
(Unaudited, amounts in thousands)		4/24/2021				4/25/2020
Cash flows from operating activities
Net income		$	107,529			$	78,984
Adjustments to reconcile net income to cash provided by operating activities
Gain on disposal of assets		(37		)		(10,068		)
Gain on sale of investments		(954		)		(693		)
Provision for doubtful accounts		(3,169		)		13,383
Depreciation and amortization		33,021				31,192
Equity-based compensation expense		12,671				8,371
Goodwill impairment		—				26,862
Pension termination refund		—				(1,900		)
Change in deferred taxes		8,790				719
Change in receivables		(38,288		)		29,686
Change in inventories		(40,727		)		14,900
Change in right-of use lease asset		65,571				67,673
Change in other assets		2,926				7,039
Change in payables		37,068				(9,913		)
Change in lease liabilities		(65,881		)		(66,238		)
Change in other liabilities		191,397				(25,755		)
Net cash provided by operating activities		309,917				164,242
Cash flows from investing activities
Proceeds from disposals of assets		2,770				11,273
Proceeds from insurance		—				1,080
Capital expenditures		(37,960		)		(46,035		)
Purchases of investments		(39,584		)		(37,477		)
Proceeds from sales of investments		36,071				37,244
Acquisitions		(2,000		)		—
Net cash used for investing activities		(40,703		)		(33,915		)
Cash flows from financing activities
Net proceeds from credit facility		—				75,000
Payments on debt and finance lease liabilities		(75,050		)		(161		)
Holdback payments for acquisition purchases		(5,783		)		(6,850		)
Stock issued for stock and employee benefit plans, net of shares withheld for taxes		9,030				3,029
Purchases of common stock		(44,202		)		(43,369		)
Dividends paid to shareholders		(16,542		)		(25,091		)
Dividends paid to minority interest joint venture partners (1)		(8,507		)		—
Net cash (used for) provided by financing activities		(141,054		)		2,558
Effect of exchange rate changes on cash and equivalents		3,015				(1,144		)
Change in cash, cash equivalents and restricted cash		131,175				131,741
Cash, cash equivalents and restricted cash at beginning of period		263,528				131,787
Cash, cash equivalents and restricted cash at end of period		$	394,703			$	263,528
Supplemental disclosure of non-cash investing activities
Capital expenditures included in payables		$	4,638			$	3,528

(1)   Includes dividends paid to joint venture minority partners resulting from the repatriation of dividends from our foreign earnings that we no longer consider permanently reinvested.

LA-Z-BOY INCORPORATED

SEGMENT INFORMATION

		Quarter Ended								Year Ended
(Unaudited, amounts in thousands)		4/24/2021				4/25/2020				4/24/2021				4/25/2020
Sales
Wholesale segment:
Sales to external customers		$	286,119			$	211,218			$	1,006,377			$	1,026,630
Intersegment sales		97,882				63,469				294,921				283,664
Wholesale segment sales		384,001				274,687				1,301,298				1,310,294
Retail segment sales		193,535				139,660				612,906				598,554
Corporate and Other:
Sales to external customers		39,816				16,403				114,961				78,798
Intersegment sales		3,405				2,157				12,409				10,294
Corporate and Other sales		43,221				18,560				127,370				89,092
Eliminations		(101,287		)		(65,626		)		(307,330		)		(293,958		)
Consolidated sales		$	519,470			$	367,281			$	1,734,244			$	1,703,982
Operating Income (Loss)
Wholesale segment		$	39,003			$	30,245			$	134,312			$	142,440
Retail segment		23,551				14,984				46,724				48,256
Corporate and Other		(12,496		)		(31,803		)		(44,300		)		(71,934		)
Consolidated operating income		$	50,058			$	13,426			$	136,736			$	118,762

LA-Z-BOY INCORPORATED

UNAUDITED QUARTERLY FINANCIAL DATA

Fiscal 2021

Fiscal Quarter Ended		(13 weeks)				(13 weeks)				(13 weeks)				(13 weeks)
(Amounts in thousands, except per share data)		7/25/2020				10/24/2020				1/23/2021				4/24/2021
Sales		$	285,458			$	459,120			$	470,196			$	519,470
Cost of sales		169,095				258,565				268,944				297,380
Gross profit		116,363				200,555				201,252				222,090
Selling, general and administrative expense		112,038				152,616				166,838				172,032
Operating income		4,325				47,939				34,414				50,058
Interest expense		(459		)		(346		)		(298		)		(287		)
Interest income		494				123				285				199
Other income (expense), net		1,474				(11		)		6,532				1,471
Income before income taxes		5,834				47,705				40,933				51,441
Income tax expense		1,155				12,401				11,344				13,484
Net income		4,679				35,304				29,589				37,957
Net income attributable to noncontrolling interests		119				(369		)		(357		)		(461		)
Net income attributable to La-Z-Boy Incorporated		$	4,798			$	34,935			$	29,232			$	37,496
Diluted weighted average common shares		45,965				46,323				46,818				46,316
Diluted net income attributable to La-Z-Boy Incorporated per share		$	0.10			$	0.75			$	0.62			$	0.81

Fiscal 2020

Fiscal Quarter Ended		(13 weeks)				(13 weeks)				(13 weeks)				(13 weeks)
(Amounts in thousands, except per share data)		7/27/2019				10/26/2019				1/25/2020				4/25/2020
Sales		$	413,633			$	447,212			$	475,856			$	367,281
Cost of sales		245,921				264,823				276,218				195,575
Gross profit		167,712				182,389				199,638				171,706
Selling, general and administrative expense		144,290				152,788				147,325				131,418
Goodwill impairment		—				—				—				26,862
Operating income		23,422				29,601				52,313				13,426
Interest expense		(318		)		(308		)		(265		)		(400		)
Interest income		727				522				844				692
Pension termination charge		—				1,900				—				—
Other income (expense), net		(760		)		(532		)		(5,998		)		307
Income before income taxes		23,071				31,183				46,894				14,025
Income tax expense		5,083				8,279				12,178				10,649
Net income		17,988				22,904				34,716				3,376
Net income attributable to noncontrolling interests		81				(311		)		(204		)		(1,081		)
Net income attributable to La-Z-Boy Incorporated		$	18,069			$	22,593			$	34,512			$	2,295
Diluted weighted average common shares		47,125				46,879				46,584				46,157
Diluted net income attributable to La-Z-Boy Incorporated per share		$	0.38			$	0.48			$	0.74			$	0.05

LA-Z-BOY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

		Quarter Ended								Year Ended
(Amounts in thousands, except per share data)		4/24/2021				4/25/2020				4/24/2021				4/25/2020
GAAP gross profit		$	222,090			$	171,706			$	740,260			$	721,445
Add back: Purchase accounting charges – incremental expense upon the sale of inventory acquired at fair value		—				138				429				541
Add back: Business realignment charges		—				—				1,253				—
Add back: Supply chain optimization initiative		—				95				—				5,386
Non-GAAP gross profit		$	222,090			$	171,939			$	741,942			$	727,372
GAAP SG&A		$	172,032			$	131,418			$	603,524			$	575,821
Less: Purchase accounting (charges) gains – adjustment to fair value of contingent consideration and amortization of intangible assets and retention agreements		(1,859		)		6,240				(15,595		)		2,663
Less: Business realignment charges		—				—				(2,580		)		—
Add back: Supply chain optimization initiative gain on sale		—				—				—				9,745
Non-GAAP SG&A		$	170,173			$	137,658			$	585,349			$	588,229
GAAP operating income		$	50,058			$	13,426			$	136,736			$	118,762
Add back: Purchase accounting charges		1,859				(6,102		)		16,024				(2,122		)
Add back: Business realignment charges		—				—				3,833				—
Add back: Supply chain optimization initiative		—				95				—				(4,359		)
Add back: Goodwill impairment		—				26,862				—				26,862
Non-GAAP operating income		$	51,917			$	34,281			$	156,593			$	139,143
GAAP income before income taxes		$	51,441			$	14,025			$	145,913			$	115,173
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense		2,038				(5,933		)		16,694				(1,428		)
Add back: Business realignment charges		—				—				3,833				—
Add back: Supply chain optimization initiative charges/(gain)		—				95				—				(4,359		)
Add back: Goodwill impairment		—				26,862				—				26,862
Less: CARES Act benefit		—				—				(5,219		)		—
Add back: Investment impairment		—				—				—				6,000
Less: Pension termination refund		—				—				—				(1,900		)
Non-GAAP income before income taxes		$	53,479			$	35,049			$	161,221			$	140,348
GAAP net income attributable to La-Z-Boy Incorporated		$	37,496			$	2,295			$	106,461			$	77,469
Add back: Purchase accounting charges recorded as part of gross profit, SG&A, and interest expense		2,038				(5,933		)		16,694				(1,428		)
Less: Tax effect of purchase accounting		837				(635		)		(642		)		(1,746		)
Add back: Business realignment charges		—				—				3,833				—
Less: Tax effect of business realignment charges		—				—				(938		)		—
Add back: Supply chain optimization initiative charges/(gain)		—				95				—				(4,359		)
Less: Tax effect of supply chain optimization initiative		—				(30		)		13				1,176
Add back: Goodwill impairment		—				26,862				—				26,862
Less: CARES Act benefit		—				—				(5,219		)		—
Add back: Tax effect of CARES Act benefit		—				—				1,261				—
Add back: Investment impairment		—				—				—				6,000
Less: Tax effect of investment impairment		—				—				—				(1,618		)
Less: Pension termination refund		—				—				—				(1,900		)
Add back: Tax effect of pension termination refund		—				—				—				513
Non-GAAP net income attributable to La-Z-Boy Incorporated		$	40,371			$	22,654			$	121,463			$	100,969
GAAP net income attributable to La-Z-Boy Incorporated per diluted share		$	0.81			$	0.05			$	2.30			$	1.66
Add back: Purchase accounting charges, net of tax, per share		0.06				(0.14		)		0.33				(0.07		)
Add back: Business realignment charges, net of tax, per share		—				—				0.07				—
Less: Supply chain optimization initiative, net of tax, per share		—				—				—				(0.07		)
Add back: Goodwill impairment, net of tax, per share		—				0.58				—				0.58
Less: CARES Act benefit, net of tax, per share		—				—				(0.08		)		—
Add back: Investment impairment, net of tax, per share		—				—				—				0.09
Less: Pension termination refund, net of tax, per share		—				—				—				(0.03		)
Non-GAAP net income attributable to La-Z-Boy Incorporated per diluted share		$	0.87			$	0.49			$	2.62			$	2.16

LA-Z-BOY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

SEGMENT INFORMATION

		Quarter Ended																Year Ended
(Amounts in thousands)		4/24/2021					% of sales			4/25/2020					% of sales			4/24/2021					% of sales			4/25/2020					% of sales
GAAP operating income (loss)
Wholesale segment		$	39,003				10.2	%		$	30,245				11.0	%		$	134,312				10.3	%		$	142,440				10.9	%
Retail segment		23,551					12.2	%		14,984					10.7	%		46,724					7.6	%		48,256					8.1	%
Corporate and Other		(12,496		)			N/M			(31,803		)			N/M			(44,300		)			N/M			(71,934		)			N/M
Consolidated GAAP operating income		$	50,058				9.6	%		$	13,426				3.7	%		$	136,736				7.9	%		$	118,762				7.0	%
Non-GAAP items affecting operating income
Wholesale segment		$	60							$	149							$	3,346							$	(4,139	)
Retail segment		—								138								612								541
Corporate and Other		1,799								20,568								15,899								23,979
Consolidated Non-GAAP items affecting operating income		$	1,859							$	20,855							$	19,857							$	20,381
Non-GAAP operating income (loss)
Wholesale segment		$	39,063				10.2	%		$	30,394				11.1	%		$	137,658				10.6	%		$	138,301				10.6	%
Retail segment		23,551					12.2	%		15,122					10.8	%		47,336					7.7	%		48,797					8.2	%
Corporate and Other		(10,697		)			N/M			(11,235		)			N/M			(28,401		)			N/M			(47,955		)			N/M
Consolidated Non-GAAP operating income		$	51,917				10.0	%		$	34,281				9.3	%		$	156,593				9.0	%		$	139,143				8.2	%
N/M – Not Meaningful